Money Word Problems

First, we will look at a money word problem involving Interest. Interest word problems are based on the formula for simple interest and the formula for amount.

Then, we will look at a money word problem that involves coins.

Formula for simple interest

i = prt

i represents the interest earned

p represents the principal which is the number of dollars invested

t represents the time the money is invested which is generally stated in years or fractions of a year.

Formula for Amount

A represents what your investment is worth if you consider the total amount of the original investment (p) and the interest earned (i)

Example:

James needs interest income of $5,000. How much money must he invest for one year at 7%? (Give your answer to the nearest dollar)

Solution:

5,000 = p(0.07)1

p = 71,428.57

He must invest $71,429

Example:

Paul has $31.15 from paper route collections. He has 5 more nickels than quarters and 7 fewer dimes than quarters. How many of each coin does Paul have?

Solution:

Let x be the number of quarters
x + 5 be the number of nickels
x – 7 be the number of dimes

25x + 5(x + 5) + 10(x – 7) = 3,115
25x + 5x + 25 + 10x – 70 = 3,115
40x = 3,160
x = 79

Paul has 79 quarters, 84 nickels and 72 dimes.

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